Page 16 - California Home Sellers Handbook

06 Living Trusts-Some Basics

Estate planners often recommend “Living Trusts” as a viable option when
contemplating the manner in which to hold title to real property. When a property is
held in a Living Trust, title companies have particular requirements to facilitate the
transaction. While not comprehensive, following are answers to many commonly asked
questions. If you have questions that are not answered below, your title company
representative may be able to assist you, however, one may wish to seek legal counsel.

Who are the parties to a Trust?
A typical trust is the Family Trust in which the Husband and Wife are the Trustees
and, with their children, the Beneficiaries. Those who establish the trust and transfer
their property into it are known as Trustors or Settlors. The settlor’s usually appoint
themselves as Trustees and they are the primary beneficiaries during their lifetime. After
their passing, their children and grandchildren usually become the primary beneficiaries
if the trust is to survive, or the beneficiaries receive distributions directly from the trust if
it is to close out.

What is a Living Trust?
Sometimes called an Inter-vivos Trust, the Living Trust is created during the lifetime
of the Settlors (as opposed to being created by their Wills after death) and usually
terminates after they die and the body of the Trust is distributed to their
beneficiaries.

Can a Trust hold title to Real Property?
No. The Trustee holds the property on behalf of the Trust.

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